Published on : Jun 05, 2014
Pemex’s Mexico’s state-owned oil major has announced the sale of a majority of its stake in Spanish oil company Repsol SA. The sale is valued to be worth USD 2.9 billion. Pemex plans to unload the balance of its stake in the coming months-bring a 25-year-old partnership to a close. This move will help the Mexican firm free up cash that can then be diverted into its own energy sector. Reports suggest that 7.86% per Repsol was sold by Pemex to unspecified private investors at a rate of 20.10 euros each. This marked a 3.7% discount to Repsol’s closing price on Tuesday. Pemex further said that it plans to sell its pending 1.4% stake by August 2014.
The Mexican company was among the three largest shareholders in Repsol. The relationship between the two companies had become fractious in recent times especially because of the companies disagreeing on the management of Repsol’s investments in Argentina and choice of top leaders. So much so that Pemex had criticized the compensation and management approach of Repsol chairman Antonio Brufau. The former was not pleased with the way the chairman had handled the Argentine government\'s decision to nationalize Repsol\'s YPF unit. In 2011, the Mexican company had even proposed the ouster of Brufau.
However, the friction reached breaking point in May 2014 when Brufau appointed a CEO that had not been endorsed by Pemex. In a statement issued by Pemex, the company said that its decision to end its investment in Repsol comes in the wake of low profitability of its shares as compared with other oil companies, as well as the differences between the corporate government styles of both companies.